 "Sebi, Securities and Exchange Board of India")
Markets regulator Sebi on Tuesday slapped fines totalling Rs 41 lakh on three entities for flouting regulatory norms in the matter of Alps Motor Finance Ltd.
The regulator imposed a fine of Rs 20 lakh on Brij Kishore Sabharwal, Rs 15 lakh on Himanshu Agarwal and Rs 6 lakh on Alps Motor Finance Ltd (AMFL).
The order came after Sebi carried out an investigation to ascertain possible misutilisation of proceeds of the preferential allotments made by AMFL.
Alps had made six preferential allotments during the period June-August 2013. The period of investigation was from June-August 2013.
In its probe, Sebi's Adjudicating Officer Amit Kapoor said, "I note that the preferential allotment and disbursal of loans out of the proceeds of preferential issue took place during the tenure of the Noticees (Sabharwal and Agarwal) as directors, and that they were signatory of the bank account in which allotment proceeds were received and from which disbursal of loans was done."
Therefore, Alps Motor Finance, Sabharwal and Agarwal are vicariously responsible for the acts of AMFL and violated the PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) rules.
Also, AMFL had failed to furnish on a quarterly basis a statement to the exchange indicating the losses it was suffering due to the manner in which the proceeds of the preferential issues were disbursed, which prevented the shareholders from getting the vital information about the profitability of the firm, Sebi noted.
Thus, it is established that Alps Motor Finance failed to comply with the provisions of the listing agreement under the Securities Contracts (Regulations) Act (SCRA). The listing agreement under SCRA now comes under Sebi LODR (Listing Obligations and Disclosure Requirements) norms.
Meanwhile, in three separate orders, the regulator has imposed a fine of Rs 5 lakh each on three entities -- Khaitan Beverages, Samarth Fincap Services and Sangeeta Jhawar -- for indulging in non-genuine trade in the illiquid stock options segment on the BSE.
The order came after markets regulator Sebi observed a large-scale reversal trade in the illiquid stock options segment on BSE, leading to artificial volumes on the exchange.
Thereafter, the regulator conducted an investigation into the trading activities of certain entities engaged in the segment from April 2014 to September 2015.
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